Is Your Bankruptcy over after the Discharge?

It can take months from the time you first file for bankruptcy until the case is closed. In that period, you could face a number of legal issues, depending on your particular financial situation. If you have filed and are waiting for the official close of your bankruptcy, here is what you need to know. 

Is Your Case Closed after the Discharge?

The discharge typically occurs after your trustee has a chance to review your assets and debts and steps are taken to reduce the amount of debt that is owed to your creditors. When you receive the discharge, you might think that marks the end of the bankruptcy process for you. However, this might not necessarily be true. 

In some cases, the judge will officially close your bankruptcy case and issue a final decree at the time the discharge is ordered. If this occurs in your case, you can then focus on rebuilding your finances. This typically occurs in a Chapter 7 bankruptcy. 

If you filed for Chapter 13 or there were extenuating circumstances in your Chapter 7 bankruptcy, your case will remain open for a period of time determined by the court. 

Why Does a Chapter 13 Remain Open?

The main component of a Chapter 13 bankruptcy filing is the repayment plan. The repayment plan takes between three to five years to complete. If you have filed Chapter 13, the judge will not close your case until after you have finished all of your payments. Since the bankruptcy trustee is still involved in your case because he or she is accepting your payments and paying the funds out to your creditors, your case has to stay open. 

Why Would a Chapter 7 Remain Open?

Even if you have received a discharge from the court in your Chapter 7, there are factors that could influence whether or not a judge is willing to issue a decree to close your bankruptcy. For instance, if the trustee has still not decided what to do with the assets taken to help pay off your debts, your case can stay open. 

Once the trustee has made a decision on what to do with the assets, your attorney can ask that the case is closed. The trustee can choose to turn the assets back over to you or sell them to help pay off your debts to your creditors. 

Your bankruptcy attorney, one like Legal Clinic Of Jerry Paeth, can help ensure that your case is being handled properly and that it is not being unfairly kept open.